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tv   Market Makers  Bloomberg  November 18, 2014 10:00am-12:01pm EST

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>> live, from bloomberg headquarters in new york, this is "market makers." >> gone with the wind, one of the largest solar companies in america is going big into wind energy. keystone evenng make sense anymore? as the senate votes, critics say the numbers don't add up. >> stick a cork in it. the company that found that there is money in wine without making it or even selling it. good morning on this tuesday here in new york city.
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a bit chilly, i'm afraid, wouldn't you say? and it stephanie ruhle is not a bit chilly, it is bloody freezing outside. you might the canadian and used to this, i cannot stand how cold it is. but if anyone is going to talk grand theft auto, it is this girl. >> really? >> just kidding. [laughter] -- starting this morning's show with japan. the prime minister is trying to hisue his economy and economic policy. he is dissolving parliament this week and calling for early elections, also delaying a second sales hike. the first tax increase is being blamed for sending japan into his economic policy. he is dissolving parliament this week and callingrecession. he wants his plans debated during the election. >> i want to make it clear for
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the debates during the general election whether our economic policies are right or wrong or if there are no other choices available for us. be ont to make>> japan's imagel trial. eike batista is also on trial, at one point he was the richest man in brazil, the seventh wealthiest in the world. he claims he now has a negative net worth of $1 billion. wall street is the big winner, over $100totaling billion. the five big banks on these deals will collect $350 million in fees. goldman sachs and bank of america will be getting a stake in that. dictionary word of the year for 2014? -- vape, referring to
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an electronic on cigarette. gross. >> that is the word of the year? >> is being considered for future additions. .> -- editions >> what was the last year? selfie? i think they could have come up with a better one. three years ago, eike batista, i sat down with him, he was 12th on the world's richest listing. he was going to get you number two. >> he had a paper fortune of $30 billion. >> a bevy of sports cars, yups, homes, and women. my, how times have changed. not necessarily a good morning for mr. batista, but it is for home depot. customers apparently still performing home improvements, even as the housing market cools off.
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we have been monitoring the retailer all morning. home depot? up, net earnings are up. guidance reaffirmed, as many analysts expected. but the bottom line is customer transactions after a big data breach are up as well. the traffic is still there. >> thinking about one home depot customer that i know well, my dad. he is there every single weekend. i don't think that ada breach is on his radar screen. >> but it is for other people. >> but think about the massive amount of people going there day in and day out. >> we did do some research, i spoke to -- >> weight, more than talking to my father? [laughter] he was notately, able to make it this morning, but my call is into him right after the segment. i did speak to david schick, they put out this interesting
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survey called the intent to shop . not sure if they interviewed your father, but this is what we know, 63% of customers have heard about the data breach. 47%, caught half, said that it will impact the shopping. when it comes to intentions to shop at home depot significantly, that was pretty much flat. they have done this survey every two weeks since the data breach came to the surface in september. again, perhaps there is a difference between perception and reality. by no means are they saying they thought it would go down, but he did want me to emphasize that they thought it was too early to tell who would win the market share if there is a movement in market share. >> lows? >> exactly, but it is unclear. >> how do you feel about it? >> i am indifferent when it comes to home depot. do-it-yourself
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person? >> the customer service at home depot is awesome. great job.h do a home depot, great customer service. lows, great customer service. >> there is the argument that they benefited from the better weather. individuals going out there to do all of their home improvements and refurbishing's before the weather hit. also, before it gets more expensive to refinance your house, meaning a lot less cash in the pockets of consumers. >> all right, thank you so much for giving us the latest. it is, home depot right downstairs. >> in the meantime one of the world's biggest solar energy companies is expanding into wind. purchasing first wind holdings for $2.4 billion. they are here with us for more on what is really a very, very
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big deal in your industry. >> it is, and good morning. >> why the wind? incentives until now have been in solar. >> it is a phenomenal active class. people whothere are are adherents to solar. there are people who are adherents to wind. clearly they generate the same thing, electricity, but they do it in different ways. should we think of them interchangeably? >> absolutely. >> why? >> at the end of the day, renewable energy is the future. it will continue to address the markets that today are not being addressed. the lower-cost is being produced on both sides in terms of higher energy prices. >> if renewable energy is the future, how far away are we from
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your industry being able to stand on its own without government subsidies? >> let me start first by saying that it might surprise you but at solar industry is growing over 17% globally. next year it will be 15 gigawatts of installed. sizable for the industry. the overall market? it is not as big as the broader installation. looking at the wind, it is roughly 50 gigawatts installed for the next few years. it is sizable. yet a small portion of the overall energy markets. >> how does this deal and the acquisition of wind assets change or your company the cost of capital? >> it doesn't. at the end of the day at doubles the company and the market. a minute -- effective immediately they are increasing to over twols
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gigawatts and have an addressable market of over two gigawatts. they have eight gigawatts of additional opportunities. what it does for us is we have been able to increase our dividends per share guidance. is what it does more than anything else. >> i believe the ceo was on a conference call with investors today saying that they paid a fair market rice, but both stocks are up 20%. how does that work? >> it has to do with growth, with unlocking value. here we are picking out the best saylass -- arguably i would the best wind company in the united states as a platform that has development and the best in class management team with a backend platform that goes up to five gigawatts without adding a dollar. it really creates value. adding a bit here, by putting
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the development assets into son edison and terraform, we are able to unlock value. >> both stocks are up 20% right now. what is your international demand? do you have plans to take us on the road? they ared say that arguably the largest renewable developer in the world, operating already internationally. withisk profile has to do up takers with a certain risk profile. so, we are taking our wind platform globally, on the development side we will be able to use the existing footprint in the back office to add to our -- to their customers. and then for terraform we will continue to partner with son edison, our partner for growth. earlier, todayll
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we presented our long-term growth model from 15% in july to 24%. it does for us, 15% to 24%. >> in what kind of timeframe? >> five years. >> over that time how much of your anticipated generation is already timed out? >> a great question. for the back of the pipeline it goes to over four gigawatts for terraforming. >> how good are those counterparties? >> investment-grade. >> so, people should have no concerns about being able to pay the bills? >> i am glad you're asking me this question, that is paramount to the terraforming. we are effectively providing you with a lower risk stream, packaging electronic into long-term predictable dividends. >> wind energy expire last year
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and most republicans want to kill it entirely. what will that mean for you? >> great question. you are asking a lot. in our calculus we have already assumed that it goes away. that was part of the underwriting. it effectively does nothing for us. if it stays, it's upside. >> for those who don't understand the relationship between son edison and your people dige more into it and read the transcripts or conference calls, the more they come away saying to themselves that it sounds like a lot of financial engineering that makes them nervous. >> first of all, i would say that it might be a new beenmenon, but it has around for a while. ishe end of the day, yulko another form of mlp.
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onfocuses very simply owning and operating assets. of cannot do a lot engineering when you are paying hard cash to your shareholders exampleitting to -- for -- taking the dividend from $.95 to $1.08, then $1.30. cannot hide around financial engineering. you actually have to a hard cash -- pay hard cash to shareholders . >> what are the risks? has takenon haslopment risk, terraform will board andue a committee for a well-run company with fair market value. it is our decision. we buy the assets at the same
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fair market rate. we just get visibility for partnering. >> carlos, thank you very much for being here. terraform, their parent company just did a deal that the market loves. both are up 20% on this acquisition. >> you thought you had a good summer? carlos. when we return, they are rocking the bond market. who is kind the new era of volatility for treasuries? >> sounds like a great job, drinking great wine and writing about it. i think so. >> of course you do. ♪
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>> october 15 started out as a normal day for the treasury markets. take a look at the treasury markets. yields plunged before rebounding with the 24/7 -- 24 basis point jump.
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the biggest fluctuation in one quarter of the century. it blew the doors off the hedge fund community. is this what we can expect going forward? >> to paint the scene, we are coming off of a really low number of years because of the stimulus. has been a big surge in since 1989. >> people have been expecting , this wasn't some degree of emasculation. you have got to remember the
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world derivatives around treasuries have swelled. trillion world of cash treasuries is magnified dramatically by the options out there as well. on the flip side you have a complete change in the structure of wall street. dealers who were previously using that money to make markets and paying traders to take risk and to be available. >> now all that they can do? treasuries get the biggest discount possible in capital treatments. there is no penalty, really, for trading treasuries their way that there is from corporate bonds. >> by that banks right now you still cannot have been taking on billions in risk and sitting on it. that, but you have got to think about why they traded treasury in the past. the reason why was to offset the risk in their inventories,
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right? offsetting the risk in their corporate debt holding. some of the activities that they did on the proprietary trading did lead tomarkets their holding treasuries on this position. there is actually more to it than just risk avoiding for treasury. >> there is still market making going on in the treasury business. the group -- to a degree that does not exist in other forms. degree, but why would dealers take on the risk of treasury? >> they are not allowed to anymore. i am not saying that dodd-frank is blocking it, but the people who are running investment banks right now are not allowing their teams to take on these positions . it is not a regulatory issue, it is a management inside banks issue at this point. >> and then there is a electronic trading. you have a surge in the amount of government bonds that have
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been traded in the electronic marketplaces. government on trading will be conducted in the electronic system next year. -- bond trading will be conducted in the electronic system next year. there is a dynamic going on where there is this one mass movement in one direction. why are you going to stand under that falling knife when it is not calling -- coming from a rational -- not the right word, but someone thinking in real time because the market is moving so quickly. >> when we talk about electronic trading in this context, it is not the same as what people have gotten used to in the equity world. like what michael lewis wrote about in his book, which has been debated since then, these are different players -- i presume -- than those who were transacting in the fixed income market? extent, but some
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traders use algorithms to decide when to buy and sell. if a lot of bad news is coming out on the 16th of october -- >> outflow trading in the fixed income market is not new. >> but there are fewer dealers and traders on the other side you. you have got to think about the positioning of the market. the huge short position on treasuries dominate is not just people that are speculating on treasury, it is the people holding on high yield bonds, loans, illiquid securities hedging against the rise to offset the risk in the fixed income portfolios. -- a lot ofarger hedging going on in the world's derivative, pushing people through a narrow door when they .eel they need to >> remember when derivatives and options make the market more stable? lisa, thank you so much. that was the latest on the fixed income markets. >> coming up next, the senate gets ready to vote on keystone. is it a matter of too little,
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too late. --? ♪
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>> it is time for bloomberg to take you on the market. let's talk about urban outfitters. a net profitted analysts expectations. same-store sales were at 7%, another big drop after last quarter's plunge. i am guessing that people are not in the room -- not in the mood. >> margins are shrinking quarter after quarter. looksts taking a close cannot see a catalyst for a turnaround and investors cannot either. >> they also took a hit because
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of all of the fashion out there. five or six years ago you did not have h&m, top shop, all the others. keystone pipeline is next, when we come back. ♪
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live from bloomberg headquarters in new york, this is "market makers." >> i am erik schatzker. >> and i am stephanie ruhle. a senate showdown is set for tonight over the keystone pipeline which would provide an easy way for canadian oil companies to ship their crude oil to american refineries. supporters need 60 votes to pass the bill forcing the administration to authorize it. president obama would still have to sign it into law. right now, senate insiders say there are 59 firm yesses and a handful of maybes. the question today is -- does
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the pipeline matter anymore? let's bring in skip york, principal oil analyst and joins us from houston. does keystone even matter? >> think the pipeline still matters from an industry perspective. if you are a canadian heavy oil producer developing the oil sands, you are still interested in cost-effective ways to move that crude oil to a large market like the gulf coast. those shippers still want access to the gulf coast by a cost-effective means and keystone xl is one of the ways they can get to that market. >> doesn't matter less given the fact that heavy oil from the tar sands has found its way to example andail for that u.s. oil production has really surged over the past few making the importance of keystone to north american energy security perhaps a little less relevant? >> we can split that question
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and half. in half. yes, you can move by rail but it's much more expensive for the shippers. from a refiner's perspective, it is ultimately more and raises the price of that heavy crude oil as they acquire it coming into the refinery. statistically, pipelines are a bit safer and more environmentally benign. although those are not the key factors, it's that cost factor that has both the oil producers and the oil refiners interested in a pipeline option as being their first preference. . it's a different quality of crude oil. areu.s. gulf coast refiners configured to run heavy crude and a lot of the oil being produced in the u.s. is more of a light and sweet crude just not a very good fit for the gulf coast consideration. while that tide oil is good for the east coast and refiners in
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the mid continent, the gulf coast refiners need access to a heavy crude slate in order to optimize the operations of their refineries. >> boone pickens has said in terms of keystone, it's not a matter of if, it's a matter of when. is he wrong? >> i think it is a matter of when. see it in this congressional session and that might have to go into next year but i think there is just enough education going on in the political realm that i think the politicians were ultimately going to make this decision are coming up the learning curve of how critical that pipeline is in the material that will be in that pipeline is to the viability of the ghost -- of the gulf coast refining system so i agree that i think we will eventually get it. is just a matter of when that political process take the final
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step so that the construction and operation of the pipeline can begin. >> they are debating the keystone pipeline and mary landrieu, senator from louisiana who is facing a tough reelection fight, is making her presentation to the senate. clearly, she wants keystone built that there is another alternative that has been composed and that would be a pipeline from alberta to the canadian east coast which could subsequently shipped heavy crude to places like india. is that a lesser alternative in your mind? it from theok at refiners perspective, if you are and you.s. gulf coast move crude oil to the east coast of canada and put her a ship, it could still sell it to the gulf coast is that's how predominately the most get unloaded into the gulf coast. while you have the rest, gulf coast refiners perspective that the market is not captive to you
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anymore so the canadian producers now have the ability to sell to markets other than the u.s. gulf coast -- from a u.s. gulf coast refiners perspective, i would rather not see that eastbound pipeline in place. from the canadian oil sands producers perspective, he just wants to be able to evacuate his material to a global market. he has filled the canadian markets with heavy crude. he is still the northern midcontinent -- he has filled the northern midcontinent crude with -- with heavy crude. they need to reach further way and the u.s. gulf coast is the largest heavy crude market in the world so that is an attractive market. they don't have the option of going down keystone xl, they won't hesitate to move east or west out of canada and get that crude oil onto the water and then they will sell it to the highest bidder in that global market. it may or may not be a gulf coast refiner. >> does that suggest that if you are at a canadian oil sands
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producer, you might prefer to see a western pipeline or western pipeline route because it opens up the global market and leaves you less exposed to demand up or down from the gulf coast refineries? from ak about it canadian oil sands producers perspective, their first preference would be to go west. the precipitate basin in asia is the growing market not just for crude oil but the oil demand in general. it's concentrated in the asia-pacific market. if i go west, i am automatically in that growth market. that is a great place for me to be. if my next choice is whether i go south down keystone xl or go east, i am probably going to want to choose to go south towards keystone xl and that has to do with who puts the highest die on my crude oil minus transportation and so the u.s. gulf coast is the next best alternative after those west coast pipelines. they would choose to go west and then south and then east.
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according to our estimates and our analysis, eventually, the canadian producers will need all of those options going into all of those directions. >> let's say keystone goes through in this session, what is the first thing we can expect to happen? >> the first thing you will see is there a still a bit more of permits in -- of permitting that canada has to go through. we still have a nebraska supreme court decision that has to come down that will finalize being able to construct a pipeline through nebraska. once you get through all of that legal and regulatory process, i think you would see transcanada immediately launch into construction as quickly as possible. the project is already so far behind that they are anticipating getting that pipeline into operation and start collecting the terror revenue as quickly as possible. >> very helpful, thank you very much. coming up this afternoon, i will
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talk with the man behind keystone, the ceo of transcanada, russ gerling. >> before you do that, they have made holiday shopping a lot easier, maybe less created. we will speak to the head of the company that distributes billions in prepaid gift cards. ♪
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>> welcome back. gift cards have become a very big business. holiday shoppers are expected to spend more than $31 billion on them this year and network is one company poised to rick and i
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lot of that dough. it distributes prepaid gift cards from all of the big brands from best buy to ihop and macy's. here is the president of blackhawk network. welcome back and thanks for joining us. >> thank you. . >> last time you joined us around this time last year, you are talking about what the digital wallet would look like and here we are a year ahead, what does look like today? >> i think we all hoped we would have made more progress in being able to pay with their wallets today. movemente are seeing a towards more digital payments. apple pay is had some announcements which are exciting ineit they are accepted 220,000 locations on their 8 million retailers out there so there is still a lot of runway to cover. we are excited about working with many of the wallets, the digital wallets and incorporating gift cards and enriching the consumers experience when they are
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incorporated into that wallace because there are things you can do once the project is digitized you cannot do in a fiscal -- in a physical world. >> are your gift cards and apple wallace? >> not today but apple is a very important partner and we saw lots of apple gift cards around the world including itunes. we are working with all of the different wallace -- while let's -- wallets. are many that have integrated gift cards and others will soon follow. soft card is not get there with gift cards. startinghese wallets with credit and debit looking to integrate other forms of payment like gift cards soon thereafter. >> is there any reason to believe that these electronic or digital wallets will not support gift cards like yours or other competing gift cards? >> i think it really comes down to providing convenience to the
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consumer. ultimately, consumers carry more gift cards than they do any other form of payment. or more correctly, they don't always carry them with them and they like to have the convenience of having them in one place. it's a matter of time before we get there. through our digital platform, we have been able to aggregate the conductivity to over 700 brands so we are like a one-stop shop for the digital wallet to integrate them into the mobile paying experience. >> were you surprised that apple pay lost and only accepted in 200,000 stores? one would think when apple steps to do something, they would do it with a bigger bang. >> i think there is a challenge in u.s. retail today. the point of sale is not set up today to accept mobile payments. you'll see an evolution over time of movement to point of sale that will accept that mobile device as a point of payment but that experience is just not seamless today. it requires some changes to the technology, legacy technology
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that has been there for sometime time and i will take some time to change. >> why is it that it took apple to really light a fire under the digital wallet business when there are a number of other companies that have had digital wallet products but have not had a lot of update. >> i think apple has a lot of appeal to the consumer. they have a strong adoption in the u.s. and around the world. i think multiple wallets ultimately will exist in the marketplace. >> not everybody will own an iphone. >> correct, frankly, there will be multiple players. it's not just technology platforms. you mentioned soft card which is a consortium of telecom players, how about the financial institutions were you already do your banking today? all of those from my perspective are an opportunity to launch a digital wallet and they are actively engaged. >> let's talk about your business. incentive in gift cards from the landscape has gotten a lot more crowded these days.
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how are you maintaining a competitive advantage? >> what we have recently to honor for the last year since i saw you last, we have expanded into a couple mentoring adjacent market that is larger than the retail business. what we are known for his retail and gift cards and lots of high traffic locations. what we are now expanding into is the incentive market which uses prepaid products with employees, with consumers, and even channel sales teams to incentivize them and a rug them -- and reward them for their performance. that is in a billion-dollar market. on the back end, it's all the same business. it's processing the transaction and creating the card and fulfilling the card. on the backend, the business works just like ours. it's extremely couple mentor and there is lots of revenue and operating synergies between that business on the business we are in at retail. that expands our addressable market considerably. >> how much room is there in the
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gift card and incentive card market for multiple players? the company was acquired via giant processing card company and are doing digital only whereas you are still doing a lot of point-of-sale stuff. orwe partnered with gift they partner with us. many of the players out there come to us to be able to support the transaction. on the backend, we have connected to multiple proprietary platforms. many of the retailers across the country, they process their own gift card transactions. there are also many, over a , of third-party processes we are connected to. we have aggregated all of that and become one-stop shop for supporting gift card transactions in the digital world. >> how are you fending off cyberattacks? one would think that gift cards are a perfect target to zap those dollar values. >> security is critical to all retailers today. it's critical to all payments
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and financial institutions. there's is no focus on security than ever before. we are doing a lot of things that i will say gift cards, as a focus for the fraudsters might not be as high. you are stealing a balance that is reducible only a single point like a gift card for safeway. you essentially have to use it at safeway. it's not as big a target of some of the open loop values. >> thanks so much for joining us this morning. she is the president of network. wineen we come back, our ratings and why so many people want the experts to tell them what they ought to drink. ♪
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>> yesterday it was oil services and pharma companies making the am they had lines but today it's wine ratings. dennis media is buying
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international wine cellar, the oldest american online publication. can you really build that big a business in wine ratings? care to tell us is the founder and ceo of venice, a multimedia platform dedicated to wine. that is the key, it's not just about the ratings anymore? >> that's right, thanks for having me on the show. venice is a multimedia wine platform. >> what does that mean? >> when we conceived this company about two years ago, it was about ringing the best and the brightest talent onto one place much like the bird is for news. we are on all the time and published five times -- much like bloomberg is for news. we collaborate to put people into the experience so when you take the bottle of wine, i want to put you in the vineyard. the ratings are important but we don't want to tell people what to drink. we want to help people figure out what they like so it's about the community of sharing information and making one accessible to people and using the most advanced technology. people just care about
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how good it tastes? beveragetely, it's a of pleasure, after also that's important. great wine typically it has a great story. >> i'm not looking to watch coca-cola being bottled but one is different. >> this is what fascinated me about wine the first place. it consummate place made by somebody. it's different from here versus there versus they are and there are grades and families and traditions and all of that is reflected in that story. it's a story what's in a bottle and want to take that off the page and make it real to you. >> how do you make money doing that? >> we are a subscription business and have customers in 55 countries of its global. that's our main revenue stream. >> do you sell product? ,> no, we sell information reviews, videos but basically were in the business of information. >> y bytanzer's? >> it's a great fit for us.
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buy tanzer's? >> when i looked at who i wanted and our team, that business made the perfect sense. it's complementary and trance and witnesses -- our strength and businesses cap lamented each other. and our businesses complemented each other. of 190,000ase reviews which allows us to scale up with things like global apps and other things we're working on. the lingouestion of platform and getting to scale and that enables us to as -- execute the rest of her plant. iwc will no longer be published? >> we will keep the existing content as an art cut and keep everything published under vinous going forward. >> tell us about the typical vinous customer. some might be saying, do i need
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this? i spent $12 per bottle for the wind of it i and that's not your typical customer, is it? >> yes and no. you have to start somewhere and every week we published a review of a $125. wine under $25. expensive and cheap but a well-made wine that does not cost a lot of money. he want a great rule of thumb on how to pick a wine, learn to the best producers are in each region and by their least expensive wine. they have made that wine with the same love and attention as they do for the really expensive wines. >> you just made an acquisition so you can basically corner the market in terms of the best content. is the goal for your business to now be bought by bigger platform? >> our goal is to build it first and we will see what happens. >> but that's what you want to do? >> we will see how it goes but
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-- we have acused lot of work to do to make this integration and acquisition work and we will not run before we can walk and we will take a step of the time the we are super excited because we have a great team of five of the best people in the world and we're just going started. >> opinions are cheap so how much competition is between you and the guy who used to work for and the legions of other cut his critics? >> we do the very best job we can. we put 110% in and let the public decide. we close with the others and had dinner together and i respect and admire them. i don't view them as competitors. i'm confident will be put up the best roddick out there, the market will resume -- will reward us -- i'm confident if we put out the best product out there, the market will reward us. >> i'm a fan of your reviews. >>. congratulations. >> we are both fans of wine. >>. without a doubt. "market makers" will be back in
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a moment -- game on in the new world of "grand theft auto." ♪
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>> live from bloomberg headquarters in new york, this is market makers. >> grand theft for the next generation, the latest version of the blockbuster video game is released for the new consoles, we'll be speaking with the c.e.o. of the company, that makes it take two. >> from flash boys to record finds, they try to stay ahead of the game, an exclusive interview with chairman. >> and be careful what you say about, the ride sharing service is threatening to dig up dirlt on its critics. welcome to the second hour of market makers.
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>> i'm so excited that straws is here. let's take you to the bulletin nd not waste anymore time. japan's prime minister is trying to get the country's economy going again. he is officially delaying a second sales tax hike for 18 months. the first tax increase is blamed for sending japan into a recession. he's also dissolving parliament and calling for new elections. he wants his economic plans debated during the campaign. >> i want to make it clear through the debates during this general election whether our economic policies are right or wrong, or if there is no other choices available for us. nhk network says the elections will be held december 14. and two takeovers totaling $100
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billion. the five big bangs that deals will collect as much as $316 million in fees, goldman sachs and banks of america will get he bulk of that. and the senate is set for an official showdown over the controversial keystone pipeline tonight. supporters say they have 60 votes they need to get final passage, but they admit it will be very close. the house approved keystone last week, so president obama may veto the proposal. and in the professional seeingl, you will not be adrian peterson on the field for the rest of the season. the nfl has suspended the minnesota's running back without pay over a child apews case. two weeks ago peterson pleaded no contest to charges he beat his son with a stick. if peterson wants to come back next year he will have to apply
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for reinstatement in april and those are today's top stories. >> any grand theft auto major event for gamers, and for investors. grand theft auto five was a billion dollar event last year and take two interactive has sold 34 million units. today that number is set to rise, perhaps dramatically because take two is back with g.t.a. five for the next jen consoles. with us this morning here on market makers is the chairman and c.e.o. of take two. he's going to be our guest host for the hour. welcome and thank you. >> thanks, nice to be here. >> so how dig big a deal is it releasing them for the next jen platforms? >> it's a really big deal, not just for us but all the gamers who love the title and love the brand. we have our first reviews out, the rating is 97. >> 97. >> the highest in the generation. there's only one review for x
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box 1 which is 95. we'll take that. >> what have your reviews been before? >> very high, in the high 90's. but for this, the reviewers have been tough on next gen games, this is a very high score. >> people need to be careful about getting ahead of themselves on the sales expectations because there are what, 160 playstation threes and x box 360's and only about 10%. >> growing rap bidly we hope. certainly feels like the curve will be very steep and we think grand theft auto 5 for next gen is a must have title. >> does that explain why you are releasing the titles the way that you do. because there was such a massive installed base, go for the installed base first? >> yeah, and i think we all manage everything perfectly but i think we did manage this transition rather well when the consoles are first launched we put out the nba, which is still the highest rated next gen
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sports title. then this season, now a year later with the beginning of a robust installed base we had a very big release schedule in october. ow of course capped off with wwe and grand theft auto 5. >> how much does it cost you to produce this game? >> a lot. >> we don't actually talk about those numbers but we do say tens of millions of dollars. these days what we do looks a lot like, from a cost point of view, luckily not for volatility or revenue point of view but from a cost point of view it looks a lot like the motion picture business. we spend a lot of money to make those titles. you can play them for a very long time and we market them around the world. it's a big risk. >> he just said high class, so you've opened the door. >> go for it. >> we've got to talk about what's in grand theft auto. players have the right to have sex with a prostitute and then kill her? is this true? >> well, i don't look at it at
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that way at all. this is a criminal setting, it's a gritty under world, it is art. and i've embraced that art. it's beautiful art but it is gritty. and let's not make no bones about the environment in which we operate. we stand shoulder to shoulder with other major motion picture releases and major television shows that explore a similar universe. so, yeah, this is a tough universe because it's a criminal universe. however there's hundreds of hours of game play. people have been engaged for over a year and there are plenty of things to do. an incredibly -- >> it's not like g.t.a. was clean without the hookers. . >> i'm not criticizing, i'm just asking. >> you're just commenting. >> let's rewind the clock maybe 18 months, before the release of g.t.a. 5 we were talking about the threat that mobile gaming and social gaming posed to the traditional suppliers of console games like yourself, for example, or electronic arts for
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example. i put together a chart that i think is fairly illustrative because people still have that idea. if i can go to the itunes store and get a game for delnt 99, why would i want to buy an x box 1, why would i want to drop 60 bills on g.t.a. five. so this is your stock price, since you took over as c.e.o. and here's what happened when zynga came along. they did great out of the box, then not so great. king digital has a bit of a rough ride since it went public in march. what does that say to you? is that the story of social and mobile gaming? or do you see promise in social and mobile gaming, maybe just not in those companies? >> i do see promise in it, it's one of the reasons it actually forms a part of what we do, although our view is, we don't look at social or mobile, we look at screen size and processing powers. small, medium large sized screens. light, mid core, heavy
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processing power. there's no question that our d.n.a. is big screens, robust engagement, high processing power. and you know, the zyngas of the world typically have focused on very small screens and light processing power. >> what does that mean? >> the ability to engage in characters who look very, very real if you play one of our sports games and move a few feet back from the screen it looks like a basketball game, it's extraordinary today. that's processing power that drives that. there are different experiences, there's a role in the market for both. what i said when i spoke 18 months ago, these are different markets. there's plenty of room for everyone. i think the issue that some companies have faced is if you want to succeed in the entertainment business, whether it's smartphone games, console games, television shows, internet programming, or motion pictures, you must focus first and foremost on quality. got to deliver a great experience. and i think the time to be
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nervous about a company is when they talk first and foremost about data, or transferring an audience, or customer engagement. the kind of conversation some of these social gaming companies -- >> but do you have to deliver that great experience? when i'm standing in line at a store and there are people next to me all playing candy crush on their phone it's not a great experience but they're do doing it. >> it is a great experience for what it is. it's not a basketball game, it's not a hundred hour console game. candy crush is a great game for what it is. the tough thing in mobile is for every candy crush there are thousands of failures. the hit ratio in the social space is very low that's why your chart looks the way it does eric. not that smartphone games are by themselves bad, they can appeal, for exactly the time you said stuff. you're standing in line at the supermarket, you're not at home engaging for hours in a basketball game. it can be great. but it appears it's harder to make that great. >> why would you not want to have both markets? seeing it costs you tens of
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millions of dollars to create a grand theft auto and market it around the world, why not go both directions? >> we are. we found that we can have success when we make companion games that use different screen sizes and support another one of our titles. for example, wwe super card is a smartphone game that's doing fantastically well. i will say when we've tried to do stand alone smartphone games our hit ratio hasn't been any better than anyone else's. so we like to do games that leverage our intellectual properties and delight consumers even more when they're engaged. candy crush is a big title, angry birds has been a big title. we don't like that math. >> straws, where does virtual reality fit into the future of grand theft auto and take two more broadly? >> it's early still to say. now i finally had a demonstration of some of the technology, it was actually the morpheus. it was a roller coaster ride. i love roller coaster rides by the way. it was really real.
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it was phenomenal. >> did it make you barf? look, that's the rub on occulus, it was such an extra sensory experience, a lot of people couldn't help but vomit. >> there are plenty of issues about using the head set for the kind of videogames that we make because among other things how are you going to see your controller, how does the controller interact. >> what does it turn you into as a member of society? like if it's an issue that we're standing there with our faces and our phones, what does it do to human kind that we're walking around looking like this? i'm serious. >> this is the question my great grandparents raised about jazz music. this is the question mark raised by rock and roll music. this is the question my parents raised about hip hop music. the culture morphs and we all have to embrace the exciting new
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opportunities in culture. our culture can withstand edgy programming. >> is gaming ready for v.r.? >> not yet. part of it is. we have to see how the head sets roll out and how we can best deliver an experience. you're right eric, we are concerned you play our games for a long period of time we don't want people getting nauseated. having had the experience, i'm not sure how long you want an immersive head set on your head. we'll find out. i will say this, if that's what consumers want, we'll be first in line to give it to them. >> how about enhanced reality that's halfway between where they're taking different plains of focus. >> yeah, i've had that done. it's very tough from my point of view but we'll see. there's a demo that i had in a room given over to this, and you had again, you had an immersive head set on, there are characters that appear to be real, and they're not real. it's pretty extraordinary. i think it remains to be seen how we can commercialize that and bring a great experience.
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>> but you guys aren't going to be the first out of the gate. >> we see no reason to innovate in terms of business models. we prefer to be a fast follower. no one else can make our intellectual property, only we can. so, i'm happy to have other people spend loads of dough on r & d. we focus on being very efficient. we don't like spending money on science projects. we like to spend money on entertainment experiences. >> and people like to buy them. >> in a couple of minutes, the chairman and c.e.o. of take two, also the man behind the media. >> when we return, they're nice drivers who pick you up when you call but why are people now saying uber is evil? >> plus, finally an excuse to use facebook at the office. the social network is now targeting your work place. ♪
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>> uber just drove into another public relations storm. a top company executive reportedly suggested last week the company hire investigators to dig up dirt on it's critics in the media. this is according to buzzfeed. is it important to point out, uber says there was no actual effort to do this, and in a statement to buzzfeed, senior vice president said "the remarks attributed to me at a private dinner do not reflect my actual views. they were wrong, no matter what the circumstances, and i regret them." uber has been getting a lot of bad press lately, so let's take a closer look at the company with surveillance co-host and our guest host take two interactive is here as well. 'm going to start on this one. he said this at a dinner party at the waiverly inn on friday night. he did not think he was saying
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this on the record. i don't believe he even knew someone at the table was a reporter. i'm going to say as a reporter, many people say crazy things. guys that we cover, guys who run companies, if you're at a bar with them, if you're at dinner, yes, he should be more responsible, but if we're going to split hairs and say, and by the way, who paid for that dinner? at the end of the dinner does the reporter say i'm here on an official capacity, i'm going to need to pay my own way. if it's unclear, this is a company trying to build itself. i do think it's unfair and it's a risk to all of us who want to build relationships with guys like strauss. if we hear this kind of news, hey strauss, want to meet me for a beer, might you think twice? >> yeah, absolutely. >> i'm all for ethics in journalism, but the kind of what he said is not really an accidental off the cuff remark. what he said he really thought through. he said this is something we should consider -- >> how do we know he really
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thought through it? >> the thing that he said was they were going to investigate journalist, dig up dirt on them and he had dirt on a specific journalist and he was going to shame her. this is not things you accidentally say. >> don't you think somebody who runs a bank could say to me, you know what stephanie, i knew you worked in investment banking for years. you don't think i could call a few of your customers and dig dirt up on you. strauss? >> the problem is, take things out of context you never know what will happen. i agree if in context it was a serious statement, we're responsible for the statements we make. i do think it's bad form on the part of reporters, can't disagree with you, but i do think you have to own your statements. on the other hand if you're kidding around, give me a break. you should be able to have dinner and relax. >> the pattern of things that uber says publicly. this is the thing that bothers me about uber. they sort of think they're not a normal company. they've always maintained we
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aren't an actual taxi service, we're just an app, we connect people. i think that's hog wash. until recently, they wanted to avoid regulation. finally they changed their tune because he's smarter than that, the official line is we understand that regulation needs to happen, we just want to be consistent. you're seeing how he's modding them. but there's a standard company, they've got labor problems with their drivers, regulatory problems, and what they want to do is stand up in silicone valley and say hey man, we're just disrupting. we're just disrupting. >> it all speaks to a company that needs to grow into its $18 billion evaluation because it's not behaving like an $18 billion company, making the same old tired silicone valley relationships, not building a relationship or with regulators, we can do it better, we're smarter, more tech savvy. as far as the comments at the inn are concerned, let's pretend for a moment that they weren't about uber. let's pretend he was talking about the holocaust and he was a olocaust denier and he's a
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senior executive at a very powerful company. should those comments be outed like they were. or he was making comments about women and their ability to work in work force. that's the light to chamen the situation, it's to to ask yourself whether what he was saying was appropriate and whether because he's a senior executive with a very public company -- >> are you say flash flooding you're a senior executive at a company like that, no matter where you are you need to be aware of what he said. maybe he didn't know who was at the table. >> i think we're seeing that now in football. corporations are under the microscope. i think it's appropriate, a privilege to be able to serve in the public eye, a privilege to have one of these jobs. i think if you want to let down your hair, stay home. >> i think there's also a distinct to be made, so from what i understand, there was confusion about whether the event was off the record or not. so that can go both ways. i think there's a complete difference between a
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relationship that i have with a source where i write everything in pencil by hand and sled it after and say this is off the record, we understand that, you're protecting that relationship. i think it's sacred, probably a cheesy word to use. was was a dinner with that private public. people getting together and talking about things. it wasn't made clear that it was off the record and honestly the comments -- >> i think they're bad comments but it was unclear if it was off the record to the buzzfeed reporter, but maybe it was also unclear to the executive. as strauss says, if you're not comfortable with what you're saying, stay home. maybe there's an argument to be made he thought this dinner is the equivilent of staying home. it's just a dinner in new york city. >> by the same token, maybe onald sterling's comments to his girlfriend would have been private. and where are we with the clippers? >> we're waiting for steve ballmer. >> i think the notion of off the
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record is anaerobic teak notion now. i think everything in today's day and age with video cameras everywhere, people tweeting, probably right at that dinner people were tweeting, you know, taking pictures and posting them and instagram during dinner. we can't possibly think we're in a zone of privacy anymore. i think off the record is just that -- >> you may not like it but you live it. >> i think off the record is a one to one conversation can a source, it's not a dinner party. >> great points all around. > thank you. ♪ >> coming up, he is one of wall street's top cops, an exclusive interview with the chairman of the cftc.
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>> coming up, looks like facebook is moving in on your turf. >> plus his agency regulates hundreds of billions of dollars a year in financial transactions, an exclusive with the chairman of the cftc next. ♪
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>> welcome back to market makers. now we're going to take you down to florida, where the cftc brought in a record amount of over three billion bucks in penalties this year. what is its focus now? our own olivia sterns is at the global financial leadership conference down in naples, with the chairman. olivia? >> thanks so much stephanie and good morning chairman, thank you for taking the time to speak with us. let's start with the f.x. probes that made big news, a big
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settlement for your bank. we're hearing different things on the different side of the atlantic. you heard from the u.k., those regulators that were end of the road. also hearing the bank cop in new york saying that he's sort of just getting going. can you give us a sense of the whether or not the bulk of the fines, the worst is behind us? >> i can't speak as to what other agencies will do, nor do i speak about any pending investigation we might have. but these orders for extremely important. we settled with five banks for attempted manipulation of the foreign exchange market. this is really part of an effort to bring integrity back to our financial markets. that's what we had before, that's what we deserve again. >> barclays has walked away from the group settlement. >> again, i can't comment on what we might have under investigation. but i can assure you that we'll continue to be very vigorous on bench mark issues. we have now been on foreign exchange and we'll continue to look at this area. it's very important.
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>> have they changed strategy at all. do you have a sense you're willing to accept a group settlement if you can do so faster in exchange of pursuing criminal liability? >> first of all, on the criminal side, we don't have the authority to do that. what we do is we work with the department of justice. i would say we decide our strategy based on the facts of the case. swift justice is important. and swift reforms are what's important. one of the things about the settlements is we're requiring the banks to take reimmediatal action to fix the market. that's what i'm interested in, fixing the market, bringing integrity back to the market. >> one area of the market that there's a lot of concern around needing to be fixed is the four x markets. would you like to see them shifted off to publicly traded exchanges? >> again, a lot of them are not subject to our jurisdiction. the bench marks were important and were part because they affect the futures market, which are already traded on exchanges. >> treasury though exempted a lot of derivitives from d.o.d. frank.
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>> that was a policy decision. i think you have to separate the policy reasons from doing that. again, from the integrity of the benching marks, the sbreg think is not what's at issue here, not whether particular types of trades need to be regulated. we had banks that were treating this market like their own private sand box. that's not what it is. it's got to be our financial markets, have to be for all americans, have to have the integrity and transparency that we need. >> your organization has of course been given a lot more power under dodd frank. can you give me an example of an area of the market that you feel needs to be more fine tuned? >> well, we've got a lot on our plate. that's plenty of areas. we've been given jurisdiction to bring the entire slots market out of the shadows, we're doing that by requiring central clearing, which is very important and more transparent trading. and data reporting. so we've made a lot of progress in that too. there's a lot more to the market which is cleared now, which
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reduces the risk that we saw in the crisis that you had institutions engaged in bilateral trades and because then of those trades, there was a lot of interconnectedness. when one institution got in trouble, that risk cascaded through the whole system. that's what brought our system almost to a point of collapse. >> aside from swaps, what other area? >> we continue our jurisdiction, futures options and swaps. on the future side, an important area is cybersecurity. i think it's one of the biggest risks that we face today. so we're very focused on that and our examinations. >> crit i thinks though say as you just acknowledged in your speech say a lot of the new rules have led to fragmentation. what's your response to that? >> well, anytime you have an unregulated market in one jurisdiction such as the united states creates rules which i think a very good rules you're going to run the risk of fragmentation. because the other jurisdictions haven't yet come online with their rules.
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europe won't come online with it until 2017. but we're going to continue to work with other jurisdictions, we're very focused on finding and very focused, we want to make them work. we want volume to increase, we want participants to increase. i think we'll get there. >> you're often referred to as obama's mystery man, particularly nobody knew your position on derivitives. you just said if people knew your position you wouldn't have many friends. >> no, no, no -- that's not what i said. what i said was when those articles were written my wife said you know, because one of the articles said he doesn't even, his friend don't even know what his views are on derivitives. my wife said if you spent your time talking about derivitives you wouldn't have any friends. but always happy to talk about them on bloomberg. >> let's talk about metal. >> depends on what particular subject. derivitives are very important to our markets, we've got to make sure they work with transparency and integrity.
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>> that is music to stephanie's ear. i want to end on the metals market, a hearing is being held this week. do you think bank ownership of metals poses an issue? >> i think it's an issue we should look at. not something for our jurisdiction but for the bank regulators. anytime you have very, very large important institutions you would look at what businesses they're in. >> what is the key to improving transparency? >> i think the commodity markets that we regulate actually have a lot of transparency because commodity futures are traded on exchanges that are regulated. with respect to the issues that senator levin is going to focus on, i think those are extremely important, particularly what's going on in the aluminum market. >> you subpoenaed jpmorgan and goldman sachs because of the alum numb warehouses. did anything come of that probe? >> i don't comment on pending investigations, but i applaud senator levin and others who are
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looking at this. we do have some concerns about how this market is working and we'll continue to look at it. >> chairman, thank you very much for your time. steph and eric, i'll send it back to you. >> thank you. great interview and great day in florida. >> coming up here on market makers, it's facebook's new frontier, your office. maybe even your cubicle. linkedin may have something new to worry about. ♪
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>> facebook at work has long been a big no-no in many work places, but that could all change. the social networking giant is trying to break into the enterprise market by testing a new product designed just for workers. so what does this mean for rivals like linkedin and microsoft? we have been reporting on this story, he joins us now from san francisco and strauss is still here. corey, facebook is the center where i stalk ex-boyfriends and
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see who they're married to today. what am i possibly going to use it for in the work place? >> you could stalk them at work perhaps? you know, i think this is really, i think we're thinking about it in the wrong context. it's not just about the way, what we use facebook for but the way we use facebook. it's the interaction that we have on facebook that has proven so successful. from a software design perspective, few things have ever been as successful as facebook. it does what it's trying to get you to do which is use it for certain purposes. now behind the scenes they've built this social graph. they built this way to understand who people are, who they're connected with and also the ways they interact much more complicated than just knowing how much ex-boyfriends you have, surely the number can't be that high. you're lovable, i'm just saying. but i think the software interaction is really the focus and they recognize the facebook approach could be very successful in the work place, just as it is in someone's personal life. >> to strauss, you run two
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companies. >> i think to the extent your team is on facebook anyway, i think creating a professional application makes sense. >> would you pay facebook for it? >> if we found out to be useful, absolutely. you subscribe to any number of business tools that allow you to move the business forward. so, if there were value delivered yes. >> is that what facebook wants out of this corey, an ability to first perhaps to charge its user something? >> probably not. look at what they're doing, some of their efforts whether it's messaging, instagram or any number of services they're offering them up for free. the data they give is sometimes without advertising. the data that they give about the users allows them to give ads and the places they offer
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ads that are so much more valuable. there are a number of companies that are going at the approach of sort of social in the work place. companies like yammer, products like sales forces, chatter, start ups like quip. you may not be aware of these names but these are really big deal. quip maybe more on the start up side of the thing. the yammer purr chause by microsoft for a billion collars. and chatter sales forces attempt to bring social communication to stuff on the cloud. companies that are spending tens of millions, hundreds of millions of dollars in rare occasions on software implementations want people to use the freaking software. if people are using facebook, and that's the approach that's working, facebook is going to look at that and say what can we offer the enterprise. that will help us gain data on users and if we do it right it will be a very functional application so c.e.o.'s like strauss will want to buy it.
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>> strauss, did your company use linkedin? >> we don't use it as a company. i think various employees will use it to connect to people and reach out to people. it's not a corporate resource but probably an individual resource. i do actually think facebook would have the opportunity to monotize from a subscription point of view, if they chose to. i think if you really want to have an enterprise solution it's tough to have advertising within that solution. although corey's right it could still give you plenty of context. >> and can't facebook simply do this to get people off of using linked in and devote more time to facebook and if they can prove they're spending more time on their platforms, more advertisers will show up. >> if you're in an h.r. department, if you're running a recruitment drive, there's nothing better than linkedin to do that with. i don't know if facebook can get close. the c.e.o. of linkedin has told me many times the reason they didn't have to exist separate from facebook is the keg stand,
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is that picture that is personal and lovable and important to you that has no context at work. and so for a recruiter, as well for a potential employee, linkedin is an incredible tool. we can see it from the revenues and the double digit growth rate. >> corey, we're going to leave you with keg stand. >> throw one right now? >> and when we return here on market makers -- >> look at him. >> yes, corey -- >> those would be some really long legs in a keg stand. i'd like to see it. >> we'll return with final thoughts. ♪
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>> we're back with some find thoughts from our guest co-host. the c.e.o. and chairman of take two interactive. strauss we talked about gaming, about grand theft auto five. we talked about uber.
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we heard from the cftc chairman. let's talk about your view on the economy. how does it feel? >> look, it feels very positive. we have a skewed view in new york because it's a great time to be in the deal business in new york, interest rates are low, corporations are sitting on a lot of cash. merger activity has tripped over $300. so it's a robust time here. the rest of our economy is just getting out of the recession and really beginning to gain some ground in the recovery. there's some wonderful signs, the price of bread dipping below clrs 80, we're still a net importanter of 30% of our energy, that was a big overhang in our economy and that gives us a leg up. of course others troubled outside of the u.s. do benefit our economy from a trade point of view. i think it's a great time to be here in the u.s. >> you're thinking about these things why, focused on media, the chairman and c.e.o. of a gaming company, you're thinking about these things in terms of
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what? disposable income and how much extra cash people have to buy g.t.a. 5 for example? >> certainly it gives us some window into the consumer economy this affects all of our businesses. the other, we're market participants. we don't try to call the stock markets. seems to me the markets reaching record highs, i'm not going to predict where the market is going. in general where the economy is going, it appears to be a place that would influence the decision to buy a business or to sell a business or to refinance a business. >> are you in the market to buy any type of businesses? >> we're always in the market to buy businesses. that's our business. >> what kind? >> everything in media and commune cases that's super charged by digital technology is on our playing field. then we're very select, looking for great organizations with late leadership. as everyone else. >> what are you negative on. what are you worried about? >> what am i negative on. i'm obviously worried about what's going on in the eurozone. some are worried about what's going on in japan. i'm glad to hear they're defering the sales tax increase,
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that looked pretty insane. i think this is a lesson never name an economic program after yourself, you know. i think while you're in office, you do that after you get out of office and you let somebody else do it. you don't do it while you're in office. i think japan continues to be a deflation anywhere environment and obviously they have this massive overhang of debt that's twice the size of their economy. >> what about take two. you've got $800 million in cash. look at all the cash sitting on balance sheets. cash feels like a commodity these days. >> it is. i think brains become more important and discipline is ever important in a situation where there is a lot of cash and low interest rates. that's when a lot of people get in trouble. this time comes and goes and people are left with the hangover. >> does it feel like there's discipline in the world of digital media right now? i feel like everything with that title attached to it is hot, hot, hot. >> i'm not sure some of the evaluations we've seen out of silicone valley imply discipline. i do think in terms of deal
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making people are being much more selective than they were a few years ago. >> all right strauss, we will leave it there. >> what a pleasure. >> thanks so much. >> thank you so much. >> market makers will be back with you in two short minutes. ♪
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>> tomorrow folks you may know the company for its travel guide but lonely planet says it's got
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a lot more going for it. you'll hear from the c.e.o. >> but for now it is 56 past the hour, it means bloomberg television is taking you on the markets. our here's more. >> that's right. you take a look at how the boards are trading, stocks jumping to yet another record all time high. let's talk about where these markets are at because it's just below 14, just last month people forget we were at a two year high. >> it's really important to note what's happened during the last five trading days you've seen the stock market trade between a 14 basis point range which is really more indicative of 10
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year treasury than equities. you're trying to figure out what are investors saying. they may be going overseas to find more compelling opportunities, so if you can see the u.s. stock market trading at about 18 times, earnings at 1.9% dividend yield when investors are looking abroad they can see the germany index is trading at about 13.5. >> or perhaps even china because the shanghai stock connect is now working and overseas investors can tap into that market. >> so, what you're seeing is actually traders aren't flowing into that. it's more of a retail trade right now over in asia. >> fair enough. so all morning long i've been watching one stock, home depot because they reported they're third quarter figures today. missing estimates but it's interesting because the company says that of course they got hit by this huge data breach, they're going to have to fork over some $28 million associated with that. but transactions were up. up from 3.2%. what's the option market looking
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like? >> so, what you saw from home depot is they beat on the top line and the bottom line but they didn't really increase their dividend. what happened is the stock is really priced for perfection. even now trading at 19 times forward earnings. the option market is indicating they're seing a further deline from here because they're not returning that capitol, and they're using that capital to buy back stocks. so actually the market would rather see it go into cap backs. so you're seeing one and a halftimes being traded against calls. >> i'm going to take a big jump to some other topic, which is japan. nainly because they are in recession right now. what do you see in the options market as it pertains to how investors are playing that story? >> so investors are really looking to japan because they think there's going to be big growth there. so the yen's going to weaken, so you're going to see exports go up. o one of the trades to look at is just by the may 20, 55 call
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on the -- >> wait, wait, what is that, d.x. j.? >> japan executive e.t.f. >> this is a way to play the e.t.f. if you don't want to do single stock games. >> correct. this is a great way to play the japanese market because you're diversified amongst many dividend companies over there. that's how the index calculates and picks the names. so this e.t.f. is going to be cash rich companies, and if you look at what's happening over in japan, the government pension has increased their exposure to equities from 12% to 25. >> that's right, they did it for both domestic as well as foreign equities and we're refering to the world's largest pension plan, this is in japan, the government plan. so when you look at what's happening most recently announcing that he's going to push back the parliament, he's going to delay the sales tax for 18 months, is this e.t.f. still a good way to play given the most recent news? >> yeah, it's a great way to
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play it. one of the reasons why you can see yesterday when it was down 1.5%, you saw three and a halftimes the amount of calls being purchased than pushed. so you saw a bunch of investors come in and they saw it as an opportunistic time because what the japanese government will do is try to implement structural reform. >> we'll see that third era, that's been something i've been reporting on for a while, that means opening up immigration standards and of course being nicer to these companies. thank you for that. we're on the markets again in 30 minutes, stay right there. ♪
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>> welcome to money clip, i hope you're ready for the best stories, the biggest interviews and the smartest videos in business news. i'm tim fox. now here's the rundown. the lame duck u.s. snat gets a jolt from a vote in washington on the keystone excel pipeline. now supporters of the pipeline they remain one vote short of approval. in the markets, chief executive of the c.m.e. group says buckle up, volatility is here to stay. in motors, there's a new car for every gear head, muscle cars, sports and a luxury

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